Applovin Corp

This management proposal asks shareholders to cast a non-binding advisory vote approving the Company’s executive compensation disclosures and, implicitly, the compensation approach disclosed for the named executive officers. Management frames this as a Say-on-Pay vote required by Dodd-Frank and SEC rules, intended to permit shareholders to express their views on NEO compensation as a whole rather than specific elements. AppLovin’s compensation program emphasizes equity (primarily RSUs) over cash, has no annual cash bonus plan, and includes ownership guidelines and clawback policies; management argues these features align executives with long-term stockholder interests. The Compensation Committee used peer data, an independent compensation consultant, and company performance to set 2025 pay; management highlights that the 2025 equity grants were structured to balance retention, parity among NEOs, and pay-for-impact design. Because the vote is advisory, it carries no binding legal effect, but management and the Compensation Committee state they will consider the outcome in future compensation decisions. The Board recommends a “For” vote, asserting that the disclosure demonstrates appropriate design and alignment with stockholder interests and that Say-on-Pay results inform future compensation. Key contextual considerations for an analyst include the company’s strong financial performance in 2025, heavy equity weighting of pay (which ties outcomes to stock performance), the controlled-company ownership structure that concentrates voting power with founders, and the Company’s recent governance actions (e.g., appointment of an independent Chair). An evaluator should weigh whether equity-heavy pay and one-year RSU vesting materially tie pay to long-term performance or instead create near-term incentives, and consider the impact of concentrated voting power on shareholder influence over compensation governance. Management’s commitment to consider the advisory vote’s outcome suggests some responsiveness, but the advisory nature and voting power concentration could limit disciplinary shareholder influence.

This management proposal seeks shareholder approval to amend the Company’s Certificate of Incorporation to broaden Article IX to exculpate officers from monetary liability to the fullest extent permitted by Delaware law. Management’s stated rationale is that modern Delaware law (Section 102(b)(7)) allows corporations to limit officers’ monetary liability for breaches of fiduciary duty in certain contexts, and extending such protection will make AppLovin more attractive to high-caliber executives who otherwise might be deterred by the prospect of hindsight-driven litigation and expensive defenses. The Board emphasizes that exculpation would not cover derivative claims, breaches of the duty of loyalty, acts not in good faith or involving intentional misconduct or knowing violations of law, or transactions conferring improper personal benefit — preserving accountability for the gravest misconduct. The amendment also mirrors protections already available to directors under the Company’s existing charter, aligning officer and director protections given comparable fiduciary roles. From a governance and risk perspective, the change shifts some litigation risk from individuals to the corporation (which may affect insurance, D&O costs, and indemnification practices) and could modestly reduce personal deterrents for risky behavior, although the limited carve-outs help mitigate that concern. The Board’s recommendation reflects a view that the competitive benefits in recruiting and retaining senior talent outweigh incremental governance risks; they also state the Board may abandon the amendment prior to filing even if approved. Analysts should assess how this change interacts with the Company’s controlled ownership structure and existing oversight (independent Chair, independent committees), the availability of D&O insurance, and whether the market for executive talent for ad tech/AI firms makes such protections necessary. While structured to be Delaware-compliant and to preserve liability for serious misconduct, investors may scrutinize whether exculpation reduces accountability and whether additional safeguards (e.g., strengthened disclosure, clawbacks, or robust independent oversight) should accompany the change.

The CRPTF’s proposal requests that AppLovin publish vote outcomes broken down by share class so investors can see whether decisions were driven by one-vote Class A holders or multi-vote Class B holders. The proponent argues that AppLovin’s multi-class structure concentrates voting power among a small group (Class B holders and Voting Agreement Parties), and that per-class reporting would increase transparency and allow Class A shareholders to monitor alignment between economic and voting interests. Management opposes the proposal, arguing existing SEC disclosures—including explicit statements of share class voting rights, ownership tables, and a post-meeting Form 8-K showing the number of Class A and Class B shares entitled to vote—already provide sufficient context, and that per-class reporting is uncommon and would increase reporting burden without meaningful benefit. Company-specific context that matters: AppLovin is a controlled company where founders hold most Class B votes and can determine outcomes; this dynamic reduces the practical effect of aggregate shareholder pressure even if Class A holders disapprove. For an analyst, the key considerations include whether the requested disclosure would materially change investor ability to assess governance outcomes, whether adoption is a low-cost transparency improvement (as the proponent claims), and whether management’s resistance signals concern about optics when per-class splits occur. The vote also serves as a governance signal: if a material minority of unaffiliated shareholders support it, that may indicate dissatisfaction with accountability mechanisms under the dual-class structure. Finally, because the proponent limited the requested effective date to 2027, implementation would be administratively tractable if the Board chose to adopt it voluntarily; the Board’s rejection reflects its view that current disclosures are sufficient and the additional reporting is not a common market practice.